Bulletin

PFO Bulletin #8: Getting the Housing Benefit Right

The NDP released its anti-poverty platform on Friday, September 16, 2011. Perhaps anti-poverty advocates should be grateful for any nod in this direction, given electioneering by all the parties that is otherwise concentrated on middle class, pocketbook issues.

But any anti-poverty policy is not equivalent to the policy necessary to end poverty in Ontario. The NDP’s commitment to building 50,000 affordable housing units over ten years is certainly commendable as is the promise of a new emergency dental care program for 50,000 low income adults.

The reference, however, to a housing benefit for 200,000 low income individuals and families at a cost of $240 million a year when fully implemented is worrisome. In its policy platform, the Liberal Party also says that it will “consider delivering a new housing benefit for Ontarians who are struggling”. The plan that the Liberals are entertaining is the same that the NDP has committed itself to.

A housing benefit of this limited scale in a province with 1.7 million people living in poverty does not begin to address the real issue. That issue is the woefully inadequate core incomes of almost 600,000 adults on social assistance and about 800,000 low wage workers who do not earn enough to meet their basic monthly living costs.

A single individual on social assistance lives in deep poverty, $11,300 below the poverty line annually; a single mom with one child lives $9,500 below the line set by the Ontario Government as our official poverty measure. Even a full-time worker earning minimum wage for the whole year falls more than $1,000 short of the poverty line.

These figures indicate that basic incomes for all the necessities of life are inadequate and require increases in social assistance and the minimum wage over the next two-three years to enable low income people to live with some measure of health and dignity. Unfortunately, until Government job creation strategies reduce the social assistance caseloads and create better paying jobs, the cost of ending deep poverty will be much higher than $240 million for a housing benefit that will go to somewhere between 15% and 20% of the population in need.

But the cost of income supports to end deep poverty would still be just one-sixth as much as the $4.2 billion in corporate tax cuts that will be fully implemented in Ontario by 2013.

A start on the path to income adequacy for people on social assistance would be a $100 a month Healthy Food Supplement for the almost 600,000 current welfare recipients. For the working poor, minimum wage increases over the next three years could bring the full-time worker above the poverty line.

When a government commits to a strategy that deals with the fundamental issue of basic income inadequacy, then a complementary measure such as a housing benefit could support all individuals and families with higher housing costs that threaten to draw from their household budgets for healthy food and other daily necessities.

Poverty Free Ontario has a clear position on the proper place of a housing benefit within its overall plan to poverty eradication:

A “two-track” approach to poverty eradication by 2020 – immediate action now (short-term first track) combined with specific action over the next three years (longer-term planned action).

Coreincome proposal 1: Implement the $100/month Healthy Food Supplement now as the first step toward income adequacy to eliminate deep poverty among people on social assistance

Core income proposal 2: Develop and implement a schedule of social assistance benefit increases over the next three years to bring everyone on social assistance out of deep poverty and as close to the poverty line as possible.

Core income proposal 3: Raise the minimum wage by three annual 75 cent increments starting in 2012 to bring it to $12.50/hr in 2014 (10% above the poverty line for a full-time worker) and index it annually thereafter.

Complementary income proposal: Develop a full housing benefit over the next year or so available to all low income people who are still paying more than 30% of household income on housing costs even after the previous core income measures are in place in order to protect their core incomes for basic necessities from high housing costs.

It is time to move beyond partial measures that avoid the structural basis for the intolerable levels of poverty in this wealthy province. Only commitment to a serious and comprehensive poverty eradication plan combining immediate action on core income adequacy with specific and concrete steps over the next three to four years will end poverty in Ontario in this decade.